When most people think of term insurance, the first thing that comes to mind is a payout after the death of the sum insured. But there’s more to this type of coverage than just the lump sum paid out to one’s family. In fact, the benefits of term insurance have grown significantly in recent years, making it a far more versatile tool for financial planning.
Here are some advantages that often get overlooked, but could be just as important as the death benefit.
Affordable Protection With High Cover
One of the most talked-about advantages is the ability to get a large coverage without paying a high premium. Term plans are priced lower compared to many other life insurance policy options. That’s because they’re designed to offer protection, not investment. The idea is simple – you pay for peace of mind. If you buy your plan early, the premium usually stays low throughout.
Digital platforms have also made it easier to compare and purchase these plans directly. You can check your estimated premium within minutes using a term insurance calculator. The cost of getting Rs. 2 crore cover can start from as low as Rs. 875 per month, depending on your age and health.
Flexible Payout Structures That Suit Real Life
Life is unpredictable. You might have loans, school fees to pay, or even ageing parents who rely on you. A lump sum payout might not be the most practical solution for every family. Some term plans now offer flexible death benefit options, where your nominee can receive part of the amount upfront and the rest as monthly income.
That structure helps your family manage day-to-day expenses while still having a financial cushion for long-term needs. Some people find it easier to plan when their payouts are staggered. It makes the transition less overwhelming during an already difficult time.
Critical Illness Cover That Goes Beyond Hospital Bills
Here’s where term insurance quietly becomes more useful than most people realise. Many plans allow you to add a critical illness rider. This means that if you’re diagnosed with a serious illness like cancer, heart disease, or kidney failure, you get a lump sum to support your treatment.
It’s not about hospitalisation costs alone. This payout helps cover recovery time, therapy, missed work, or even lifestyle adjustments. While it’s optional, adding this rider to your term policy builds an extra layer of protection that can reduce stress during already challenging times.
Some premium insurance providers like Axis Max Life Insurance offer riders that cover up to 64 listed illnesses. That kind of range shows how seriously the industry is treating critical illness risks now, and how much value it can offer.
Tax Savings That Fit Well Into Year-End Planning
Another reason people look into term plans is because of the tax savings. You can claim deductions on premiums under Section 80C of the Income Tax Act, with limits up to Rs. 1.5 lakh a year. If you’ve added health-related riders, like critical illness, those may qualify under Section 80D (only under the old tax regime) as well.
The best part is that the money your nominee receives is also exempt under Section 10(10D), which means the financial support stays intact without extra deductions. These benefits work well for anyone looking to balance protection with tax planning during the financial year.
Accidental Death Benefit That Adds Financial Cushion
An accident often comes without warning, and the financial impact can be more severe than expected. When your base plan includes an accidental death benefit, your family receives an additional sum over and above the regular coverage.
This helps manage unexpected costs like hospital bills, debts, or children’s education. Some plans also include protection in case of permanent disability. If you can’t continue working due to the accident, the policy doesn’t lapse, and you still receive financial support.
Option to Get Premiums Back at Maturity
If you’ve ever hesitated to buy a term plan because you weren’t sure if you’d ever claim it, this feature might help you think differently. Some plans offer a return of premium option. If you complete the policy term without making a claim, the base premium you paid gets returned.
You pay slightly more for this feature, but it feels like a reward for staying healthy. While taxes and rider premiums aren’t included in the refund, it still works as a form of disciplined saving for many people.
Tailoring the Policy to Match Your Life Stage
There’s no fixed formula when it comes to choosing the right plan. You need to account for your income, your lifestyle, and the number of people who rely on you. Ideally, the sum assured should be around 8 to 10 times your annual income. But it also depends on future expenses like a child’s college fees or repaying a home loan.
That’s why modern term plans offer room for customisation. You can select riders that fit your health profile, choose how long you want the cover to last, and even modify payout methods. Over time, your needs will change, so it’s important to review the plan periodically.
To help visualise how premiums vary, here’s a simple table based on non-smokers choosing Rs. 1 crore and Rs. 2 crore coverage:
| Age | Rs. 1 Cr Cover (Male) | Rs. 1 Cr Cover (Female) |
| 25 | Rs. 1,223 | Rs. 1,038 |
| 35 | Rs. 2,138 | Rs. 1,729 |
| 45 | Rs. 3,946 | Rs. 3,012 |
| 55 | Rs. 8,166 | Rs. 6,013 |
| Age | Rs. 2 Cr Cover (Male) | Rs. 2 Cr Cover (Female) |
| 25 | Rs. 2,147 | Rs. 1,769 |
| 35 | Rs. 3,540 | Rs. 2,857 |
| 45 | Rs. 7,468 | Rs. 5,652 |
| 55 | Rs. 15,571 | Rs. 11,534 |
Note: Based on non-smoker rates, excluding GST, under the Smart Total Elite Protection Plan of Axis Max Life Insurance.
The Bigger Picture
A life insurance policy should offer more than just one-time support after death. It should offer flexibility, relevance, and peace of mind during your lifetime as well. Whether you’re concerned about illness or accidents or just want something returned after a long commitment, term insurance has evolved to meet those needs.
Premium insurers have recognised this shift. Plans now offer riders, flexible benefits, and digital tools to help you stay informed. It’s not just about buying a policy and forgetting it. It’s about having one that understands where you are in life and keeps up with your goals.
So, when choosing your cover, take a little time to see what your plan can do for you, because the benefits of term insurance today go far beyond what they used to.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to change. Please consult an expert before making any related decisions.
Standard T&C apply
Tax benefit is subject to change as per the prevailing tax laws.
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